Supplies of Russian vodka for export decreased by almost 80% due to sanctions

The export of Russian vodka in the first quarter of 2023 compared to the same period last year decreased by 77% to 752,027 liters in terms of pure alcohol and by 76.75% to $6.33 million in monetary terms. This is evidenced by the data of the Federal Customs Service, which Vedomosti got acquainted with. The representative of the service did not comment on the indicators, referring to the fact that information on foreign trade for certain commodity groups is temporarily not provided.

The drop in exports is due to the ban on the supply of this type of alcohol to the EU countries, the USA and Canada, says Vadim Drobiz, director of the Center for Research on Federal and Regional Alcohol Markets (CIFRRA). According to him, these markets accounted for up to a third of the total volume of exported products. At the same time, expensive vodka was sold, which gave [компаниям] not only foreign exchange earnings, but also additional advantages for the image, the expert notes.

The ban on the supply of alcohol from Russia to the EU countries was adopted by the sixth package of sanctions in July 2022. The United States banned the import of Russian vodka back in March last year, and Canada began to restrict supplies in February.

Large vodka producers have also noticed the dynamics. Representative of “Rust” (brands “Russian standard”, “Talka”, etc.) also linked them with sanctions. The company plans to reorient its supplies to the markets of the CIS, the Middle East, India and the Asia-Pacific region. Rust expects that by 2024 these areas will completely replace the volume of export sales to the countries of Western Europe and America, the representative assured. Stellar Group (brands Veda, Gzhelka, etc.) is working to increase shipments to Africa, Central Asia, China, Israel, assured the commercial director of the company Alexander Grevtsov. He expects exports to pick up in the second half of the year.

They are working on new markets in Asia, Africa and South America and at Ladoga (brands Tsarskaya, Khlebnaya, etc.). The main difficulty in new markets lies in the logistics, which needs to be adjusted, the company representative added. Ladoga expects to increase shipments to China by 50%.

The ban on deliveries to the EU, the US and Canada will not affect domestic production in any way, says Vadim Drobiz. A slight drop, which is recorded in the first quarter of this year, is associated with large stocks formed in the second and third quarters of 2022. Then production increased sharply against the background of the crisis and a special military operation, explains Drobiz. According to Rosstat, for the three quarters of 2023, the production of vodka decreased by 8.6% to 15.84 million decalitres.

There is no risk of a decrease in production, including due to the withdrawal of certain Western producers of premium vodkas from the market, which makes it possible for Russian companies to occupy a niche, Grevtsov believes. On April 18, the Swedish company Absolut announced the decision to cease operations in Russia.

Vadim Drobiz predicts stabilization of vodka output. According to him, domestic demand will grow, including due to the fact that foreign tourist trips have significantly decreased. This leads to an increase in domestic consumption, concludes Drobiz. At the end of 2022, the Association of Tour Operators predicted a decrease in outbound tourism from Russia by at least a third.